Wednesday, May 23, 2012

NYS Hearings On Banksters' Force-Placed Insurance Racket Begin; Homeowners Give Testimony Describing Alleged Abuses

In Albany, New York, The Associated Press reports:

  • Premiums for so-called force-placed insurance have more than tripled since 2004, producing enormous profits for insurers and the banks that take out policies when a homeowner fails to maintain coverage required by the mortgage, according to New York regulators.

  • In some cases, the premiums are "exponentially higher" than regular homeowners insurance and can push homeowners into foreclosure, Department of Financial Services Superintendent Benjamin Lawsky said Thursday at the start of public hearings on insurance rates. Such premiums rose from $1.5 billion in 2004 to $5.5 billion in 2010 during the U.S. housing crisis and have probably risen since, he said.

  • A handful of homeowners told regulators about insurance rates they were forced to pay that were up to three times higher than their original policies, making it harder to keep their homes. Some said they didn't get notices about the changes until they got higher bills for their escrow accounts.

  • Consumer advocates said similar stories were widespread, and that homeowners also end up with policies that don't cover their personal injury liability or their house contents.
See also, New York Daily News: 'Forced place insurance' gouging threatens to kick homeowners to the curb (State hears claims that banks are jacking up mortgage payments with possibly unwarranted insurance payments).

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